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If you want to talk about manipulating diamond prices, just read about DeBeers - you would be hard pressed to manipulate any market more than diamonds. I wouldn

If you want to talk about manipulating diamond prices, just read about DeBeers - you would be hard pressed to manipulate any market more than diamonds. I wouldn't buy a diamond if you paid me. Want to know the real value of a diamond? Try to sell it. Then I PROMISE you will know the value of a diamond.

dangrossman 14y ago
The value of a diamond is not its retail value nor its resale value, it's what it means to the recipient. Don't lose sight of the fact that we're here discussing this on the web, where people pay hundreds of dollars for downloads with virtually no marginal cost at all, and markets for unique services consist of a single provider arbitrarily setting prices for something that cannot be resold at all. If I was going to get angry about diamonds, it'd be about the poor labor conditions of some mining operations, not the artificial value we attach to precious gems. If suppliers allowed diamonds to become worthless, we'd just find some other gift to symbolize what the cost of diamonds symbolize now.
- neverm0re 14y ago
  And while we're at it, can we please stop referring to Santa Claus as a myth? It's cramping our market potential.
ghshephard 14y ago
As it turns out, diamonds fall into a particularly important category of objects which are both (A) Expensive to purchase, but simultaneously (B) Have little resale value. It is these properties that make them ideal in the context of a marriage proposal. From a game theoretic position, it demonstrates serious intent on the part of the proposer, in that they can't afford to propose to many partners, while, at the same time, protecting (mostly) the proposer from gold diggers, as the person being proposed to will not be able to resell that ring to others. People who buy diamond rings, therefore, are actually rational actors.
- rdtsc 14y ago
  > People who buy diamond rings, therefore, are actually rational actors. Don't they stop being so once they are aware of the diamond market. Isn't it more rational at that point to pay off student loans or put a down-payment on a house? If something that can be A) expensive to purchase and B) has little resale value is needed why not an expensive trip to Bora Bora? It fact it has 0 resale value because you only come back with pictures and a tan from it.
  - ghshephard 14y ago
    Regarding whether it would be more responsible to pay down student loans/down payment/pretty much anything other than a diamond - absolutely. But, if your goal is to demonstrate commitment to the betrothal - the Diamond ring does the job. The Diamond has the additional (and important) aspect of being a demonstrable and physical artifact of the proposers intent. Plus, it's sparkly. The vacation doesn't serve our purpose as well, because the proposer will get significant utility value out of the trip. But you are on the right track.
    - brc 14y ago
      >Plus, it's sparkly. Indeed - a lot of diamond knockers haven't really looked at a nice diamond in the sunlight. They are true wonders of light refraction. In your vacation example - it's impossible for the casual onlooker to know that the tan and relaxed demeanour came from a trip to Bora Bora, rather than a golfing trip to Arizona. The important point for the diamond wearer is the the long-term appearance of having found someone willing to waste money on a useless item. A large part of the use of the diamond is the social proof - any casual observance of the behaviour of females comparing engagement rings. Yes, it is totally irrational. Yes, it is manipulated by marketing. Yes, it is what it is. If you go mental at every irrational (as far as the purchase goes) act caused by marketing controlling social norms, well, you'll go insane. Human nature is obsessed with status symbols - always has and always will - these impulses are there for marketers to interpret and direct. Always have and always will.
      - 14y ago

dangrossman 14y ago

The value of a diamond is not its retail value nor its resale value, it's what it means to the recipient. Don't lose sight of the fact that we're here discussing this on the web, where people pay hundreds of dollars for downloads with virtually no marginal cost at all, and markets for unique services consist of a single provider arbitrarily setting prices for something that cannot be resold at all. If I was going to get angry about diamonds, it'd be about the poor labor conditions of some mining operations, not the artificial value we attach to precious gems. If suppliers allowed diamonds to become worthless, we'd just find some other gift to symbolize what the cost of diamonds symbolize now.

neverm0re 14y ago
And while we're at it, can we please stop referring to Santa Claus as a myth? It's cramping our market potential.

ghshephard 14y ago

As it turns out, diamonds fall into a particularly important category of objects which are both (A) Expensive to purchase, but simultaneously (B) Have little resale value. It is these properties that make them ideal in the context of a marriage proposal. From a game theoretic position, it demonstrates serious intent on the part of the proposer, in that they can't afford to propose to many partners, while, at the same time, protecting (mostly) the proposer from gold diggers, as the person being proposed to will not be able to resell that ring to others. People who buy diamond rings, therefore, are actually rational actors.

rdtsc 14y ago
> People who buy diamond rings, therefore, are actually rational actors. Don't they stop being so once they are aware of the diamond market. Isn't it more rational at that point to pay off student loans or put a down-payment on a house? If something that can be A) expensive to purchase and B) has little resale value is needed why not an expensive trip to Bora Bora? It fact it has 0 resale value because you only come back with pictures and a tan from it.
- ghshephard 14y ago
  Regarding whether it would be more responsible to pay down student loans/down payment/pretty much anything other than a diamond - absolutely. But, if your goal is to demonstrate commitment to the betrothal - the Diamond ring does the job. The Diamond has the additional (and important) aspect of being a demonstrable and physical artifact of the proposers intent. Plus, it's sparkly. The vacation doesn't serve our purpose as well, because the proposer will get significant utility value out of the trip. But you are on the right track.
  - brc 14y ago
    >Plus, it's sparkly. Indeed - a lot of diamond knockers haven't really looked at a nice diamond in the sunlight. They are true wonders of light refraction. In your vacation example - it's impossible for the casual onlooker to know that the tan and relaxed demeanour came from a trip to Bora Bora, rather than a golfing trip to Arizona. The important point for the diamond wearer is the the long-term appearance of having found someone willing to waste money on a useless item. A large part of the use of the diamond is the social proof - any casual observance of the behaviour of females comparing engagement rings. Yes, it is totally irrational. Yes, it is manipulated by marketing. Yes, it is what it is. If you go mental at every irrational (as far as the purchase goes) act caused by marketing controlling social norms, well, you'll go insane. Human nature is obsessed with status symbols - always has and always will - these impulses are there for marketers to interpret and direct. Always have and always will.
    - 14y ago